Disconnect: the establishment doesn’t get it

Posted on Thursday 25 June, 2009
Filed Under Politics

 


THREE news stories from the last fortnight or so have really brought home to me the extent of the current disconnect between the establishment and the rest of the population of the United Kingdom.

First came the initial announcement that Sir John Chilcot’s inquiry into the Iraq war would be held being closed doors. Yes, I know the government rapidly had to backtrack on this one. But how could Gordon Brown have possibly imagined that the level of secrecy he wished to ensure would be acceptable to the public, not least the one million and more of us who participated in the big anti-war demo in February 2003?

Then came publication of heavily censored – sorry, I meant to say ‘redacted’ – details of MP expenses claims, weeks after the Daily Telegraph had filled its pages for days on end with the most damaging information it could extract from this raw material. Too little, too late.

Did the parliamentary authorities have the foggiest idea how evasive, tokenistic and half-hearted this made the entire exercise look? If all we get to see is thousands of chainstore receipts defaced beyond recognition by marker pen, when the press has already delivered up all the juicy bits anyway, the abiding impression is not one of disclosure. Instead, we are inevitably left with the idea that these guys have got something to hide.

Finally, there was the little matter of the all-but-£10m package that Royal Bank of Scotland has deemed necessary to ‘incentivise’ chief executive Stephen Hester.

Pick me up if I am missing something here, but isn’t RBS a financial sector basket case that is 70% owned by the taxpayer, and therefore a nationalised industry in all but name?

Has UK Financial Investments – the government body that controls ‘our’ stakes in several leading banks – stopped to think how word of Hester’s remuneration package will play with Honda staff forced to go onto short time, or BA employees being asked to work a month without pay?

In the normal run of events, perhaps none of these three matters would excite more than passing resignation. But when they come thick and fast like this, the voters are going to start to notice.

Such is the extent of Labour’s complicity and the left’s impotence that the chief beneficiary can only be the populist right.


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Comments

3 Responses to “Disconnect: the establishment doesn’t get it”

  1. Paul Bell
    on June 25th, 2009 at 14:18

    I completely agree with you. We are heading into a Tory government because the Labour government is not listening.

  2. James
    on June 25th, 2009 at 15:34

    To your three points: Yes, yes and not sure.

    The banking issue is complicated and shows precisely why nationalisation (or pseudo-nationalisation) is usually the worst option.

    As a country we need RBS to be successful and preferably for the public to be able to sell its share in the bank to recoup its investment with a profit.

    To achieve this the bank will need good leadership and to make decisions which aren’t necessarily in line with Government policy (eg lending at 2007 levels).

    If weak leadership is installed and Government is allowed to dictate policy to the bank as a country we will be lucky to see our investment returned.

    All in all mess – however if the new CEO achieves the £10m package – then at least as a country we will not be out-of-pocket.

  3. David Love
    on June 26th, 2009 at 07:40

    The point is that RBS, given the huge public investment, should be responsive to the public interest. Now the simplest way of doing that in a nationalised corporation is for Government to be “allowed to dictate policy to the bank” – in the same way that majority shareholders direct policy in any listed corporation. But even if a less drastic approach is followed RBS should at least be sensitive to the public mood on bonuses! The normal standard for a professional is that if you perform well you get promoted – or retained if you are an executive. Paying extra money (bonus) for an executive to deliver the job they are supposed to do is ridiculous – it means the (not small) salary paid to such an executive is what they earn for failure…

    But there is another point here: the rescue package was not an investment in the conventional sense of putting in money to make a profit – otherwise a private body would have been willing to do that. When government rescues a private company there will always be policy issues that the government intends to implement through that.